Chula Vista Palomar Point: 27-Unit $11.4M Homeless Housing Opens November 2026

What Is the Palomar Point Housing Project in Chula Vista?

Palomar Point is a permanent supportive housing development converting the former Palomar Motel at 1160 Walnut Avenue into 27 fully independent studio apartments for very low-income residents experiencing or at risk of homelessness. The city acquired the shuttered motel in October 2023 for $6.2 million and selected Wakeland Housing and Development Corp. to renovate and operate the property.

The project includes 20 units for individuals, seven units reserved for veterans through the VA Supportive Housing Program, and one on-site manager's unit. All residents will receive free on-site supportive services and case management tailored to their specific needs, creating a comprehensive approach to addressing homelessness in the South Bay region.

Groundbreaking ceremonies took place in January 2026, with Mayor John McCann, Councilmember Andrea Cardenas, and state housing officials in attendance. The project represents Chula Vista's first major motel-to-housing conversion and demonstrates the city's commitment to addressing homelessness through innovative solutions rather than relying exclusively on traditional shelter models.

Project Location and Context

The Palomar Point site at 1160 Walnut Avenue sits in the 91911 zip code, an established Chula Vista neighborhood with mixed residential and commercial uses. The location provides access to public transportation, social services, and employment opportunities—key factors that support successful permanent supportive housing outcomes according to research from the California Policy Lab.

The project follows the successful "Housing First" model, which prioritizes providing stable housing as the foundation for addressing other challenges such as mental health, substance abuse, and employment. Research from the National Alliance to End Homelessness shows this approach achieves housing retention rates of 85% or higher, significantly outperforming traditional shelter systems.

How Much Did Chula Vista Invest in the Palomar Point Project?

The total project cost is $11.4 million, with funding split between state and local sources. The California Department of Housing and Community Development awarded $8.61 million through the Homekey+ Program, funded by Proposition 1's $2.2 billion allocation for permanent supportive housing. Chula Vista is contributing approximately $3 million in city funds as a loan to help pay for refurbishment costs.

This represents the city's first major motel-to-housing conversion project and demonstrates Chula Vista's commitment to addressing homelessness through innovative solutions. The per-unit development cost of approximately $422,000 ($11.4M ÷ 27 units) is competitive compared to new construction affordable housing, which typically exceeds $600,000 per unit in coastal California markets, making motel conversions an increasingly attractive option for municipalities seeking cost-effective housing solutions.

The Homekey+ Program represents California's continued investment in converting underutilized commercial properties into permanent housing solutions. Since its 2020 launch, Homekey has awarded $3.6 billion statewide to support 259 projects creating 15,850 homes, projected to serve more than 172,000 California households over the projects' lifetimes according to the California Department of Housing and Community Development.

For South Bay real estate investors, the significant state and local funding commitment signals government prioritization of adaptive reuse strategies for addressing housing needs. This may create a trend of additional motel and hotel conversion projects throughout the region, potentially affecting commercial property valuations and creating acquisition opportunities for cash buyers who can identify properties suitable for future conversion before municipalities formally target them.

When Will Palomar Point Open and What Renovations Are Planned?

Construction and renovation work is anticipated to be completed by November 2026, with full occupancy expected by January 2027. The comprehensive renovation includes converting motel rooms into studio apartments with full kitchenettes, installing new flooring throughout, updating all fixtures, replacing the roof, upgrading plumbing and electrical systems to modern standards, adding fire sprinklers throughout the building, and implementing accessibility improvements to meet ADA requirements.

The rapid timeline from groundbreaking in January 2026 to completion in November 2026—approximately 10 months—reflects the efficiency of adaptive reuse projects compared to new construction, which typically requires 24-36 months. This accelerated schedule creates a defined window for real estate investors to position themselves in the surrounding neighborhood before the market adjusts to the new housing presence.

Comprehensive Renovation Scope

Wakeland Housing and Development Corp., the selected developer and operator, will oversee extensive renovations to transform the aging motel into modern supportive housing. The work includes:

• Full kitchen installations: Converting motel rooms into self-sufficient studio apartments with cooking facilities
• Complete flooring replacement: New flooring throughout all units and common areas
• Roof replacement: New roofing system to ensure weatherproofing and longevity
• Infrastructure upgrades: Modern plumbing and electrical systems meeting current building codes
• Fire sprinkler system: Building-wide sprinkler installation for enhanced safety
• ADA compliance: Accessibility improvements including ramps, doors, and accessible units

The November 2026 completion timeline means surrounding property owners have approximately six months remaining to assess the project's impact on their real estate holdings and make strategic decisions about whether to hold, sell, or acquire additional properties in the area before the facility opens and market perceptions stabilize.

Will Palomar Point Affect Nearby Property Values in Chula Vista?

Research from the NYU Furman Center provides data-driven insights into how supportive housing impacts surrounding property values. Their landmark study examined 123 supportive housing developments across New York City over an 18-year period from 1974 to 2005, analyzing property value trends within 500 to 1,500 feet of supportive housing units.

The study found that supportive housing does not have a statistically significant negative impact on property values within 500 feet, and once construction was completed, property values within 500 feet actually increased relative to other properties in the neighborhood. Price increases actually accelerated after facilities opened, with residential properties within 500 feet rising more rapidly than comparison properties located 500 to 1,000 feet further away.

Key Research Findings

For Chula Vista's current market where the median home value stands at $803,335 according to January 2026 Zillow data, these research findings suggest minimal negative impact and potential stabilization benefits from the addition of professionally managed supportive housing. The median sale price of $820,000 with modest year-over-year appreciation of 0.9% according to January 2026 Redfin data indicates a stabilized market environment where well-managed supportive housing is unlikely to cause significant value disruption.

Chula Vista Market Context

The combination of research evidence suggesting neutral-to-positive value impacts and Chula Vista's stable market conditions indicates that strategic investors with cash purchasing power can acquire properties near Palomar Point without significant risk of value deterioration. The six-month window before November 2026 opening creates an opportunity to position ahead of any market adjustment while research suggests the long-term value trajectory should remain stable or positive.

What Cash Buyer Opportunities Exist Near Palomar Point in South Bay?

The November 2026 completion timeline creates a six-month window for strategic cash buyers to acquire properties in the surrounding area before market perceptions fully adjust. Chula Vista cash buyers collectively purchased over 444 foreclosure properties and 256 distressed properties in the past 12 months, with approximately 1,957 properties qualifying as flips, demonstrating active investor interest in the market according to HomeLight's 2025-2026 market data.

Single-family homes within 0.5 miles of the Palomar Point site at 1160 Walnut Avenue represent immediate opportunities, particularly properties requiring cosmetic updates or repairs that appeal to value-oriented buyers. The broader South Bay market shows competitive conditions with homes receiving an average of three offers and selling in approximately 34 days, creating urgency for cash buyers who can close quickly without financing contingencies.

Strategic Acquisition Targets

Additionally, the success of Chula Vista's motel conversion model may inspire similar Homekey projects throughout San Diego County, creating acquisition opportunities for investors to identify other distressed motels suitable for conversion before municipalities formally target them. Cash buyers with knowledge of California's Homekey Program criteria can position themselves ahead of government acquisition efforts, potentially capturing value before properties are bid up by competing jurisdictions.

The 91911 zip code near downtown Chula Vista, where Palomar Point is located, historically lags behind higher-priced neighborhoods like Eastlake and Otay Ranch, creating entry points for investors with lower initial capital requirements. The completion of Palomar Point and potential future supportive housing projects will likely attract additional city infrastructure investments and social services to surrounding areas, potentially catalyzing broader neighborhood revitalization that benefits early-positioning investors who acquire before these improvements become fully priced into the market.

Frequently Asked Questions

Citations and Sources

This article is based on verified reporting and research from the following sources:

All market data, pricing information, and project details were verified through multiple sources and reflect conditions as of January 2026.